Baltimore & O. R. Co. v. Allen

17 F. 171, 1883 U.S. App. LEXIS 1853

• Court: U.S. Circuit Court for the District of Western Virginia
• Decided: May 15, 1883
• Status: Published

Opinions

Bond, J.

The facts in this case, as shown by the affidavits and proofs filed, are few. The complainant is the Baltimore & Ohio Bailroad Company, a corporation of Maryland, which-operates certain roads in Virginia. These roads were duly assessed for taxes by the state officers to the amount of $6,411, for which sum the complainant tendered in payment coupons of the bonds of the state of Virginia issued under the act of March 30, 1871, “receivable at and after maturity for all taxes and debts, dues and demands, due the state.” Not regarding the tender as a legal settlement of the debt, the defendants, as they were required to do by the state law providing for the taxation of railroads, after 60 days’ default, assessed the companies 30 per cent, in addition to their real tax as a penalty for their,default. The defendant Hamilton, as tax collector, has seized the property of the complainant, and threatens to sell it for the amount of the taxes and the penalty. The bill asks that he may be enjoined from so doing; that the tender of the coupons may be regarded as payment or extinguishment of the debt; and that the company may not be subjected to a penalty for doing what the act of March 30, 1871, contracted with the holder of such coupons he might do.

That the coupons must be received for public taxes, when tendered, the supreme court of the United States has, at its last term, emphatie- . ally decided. Antoni v. Greenhow, 2 Sup. Ct. Rep. 91. The language of the court is: “The right of the coupon-holder is to have his coupon received for taxes when offered.” The fact here is that the complainant tendered coupons, and that they were rejected and the tax increased because coupons, and not money, were so offered. It is clear, then, that a right of the coupon-holder has been denied, according to the interpretation of the act of March 30, 1871, by the supreme court. What remedy has he ?,i

In the case of Antoni v. Greenhow mandamus was sought as the remedy, but the forms of proceeding in that in Virginia were not complied with, for the reason that the complainant alleged: they were , unconstitutional because they impaired the obligation of the contract. But the supreme court decided that the writ of mandamus now existing in Virginia did not differ so much from the remedy existing when the coupons were issued as to impair the obligation of the contract. It expressly decided, as we have seen above, that the right of the coupon-holder was to have them received when offered; but it also decided that if he sought by mandamus to compel such receipt, he must follow Virginia practice in obtaining that remedy.

The allegation or claim of this complainant is that it owes no taxes; that the tender of the amount in coupons has paid or extinguished the debt. It does not ask the court to compel the tax-collector to do any act he refuses to do, but to stop him from doing an unlawful thing, namely, from taking property for taxes when none are due, and from imposing a penalty where there is no default; and, surely, although the writ of mandamus is altered so as to be useless for the purposes of his case, and the writ of replevin is wholly abolished in Virginia, the supreme court has not decided that the complainant has no remedy whatever. Had such been its decision it would have declared that the words “was receivable when offered” meant or should read, “was receivable after they had been reduced to judgment;” for that is the only form under which, by the writ of mandamus, the receipt of coupons can bo compelled in Virginia.

The complainant alleges that a large part of its rolling stock on the taxed roads in Virginia is in custody; that it cannot, while such is the ease, fulfill its transportation contracts, the non-performance of which will subject it to numberless suits for breach of such contracts, and to the liability of large damages.

In general the courts of equity are slow to restrain the collection of taxes. They will not do so because the tax is alleged to be void or illegal, (92 IT. S. 515;) but whore there will he irreparable damage, as is plain in this case, and where all taxes have been paid by the tender of coupons receivable for taxes and the complainant lias been subjected to a larger assessment by reason of its offer of taxpaying coupons rather than money,—which offer the supreme court lias decided it was its right to make,—I think an injunction ought to issue.

This is not alleged to be'a void and illegal tax; it is asserted to be a paid one, and paid in the way complainant had a right to pay it. The hill docs not seek a remedy under any of the methods of practico provided by Virginia. It appeals to the equitable jurisdiction of the United States courts. The complainant is a non-resident of this state, asserting a right which the supreme court, in Antoni v. Greenhow, as I understand it, decides that it has, and a failure to enforce which will cause it irreparable damage. The complainant has no adequate remedy at law. The writ of mandamus is of no avail to it; it has paid its debt once and would have to pay it again to get that remedy; it cannot got its goods hack from the purchaser by replevin, for there is no such -action in Virginia; it cannot sue the tax-collector for trespass, for since the institution of the suit of Antoni v. Greenhow this state has by law forbidden it to do so. Altogether, it seems to me the complainant would be remediless and its “right” a delusion, did hot a court of equity listen to' it.

The argument of the attorney general that this action is not within the jurisdiction of this court, because it is, in fact, a suit against the state, which does not permit itself to be sued, does not seem to me :to be sound. From the case of 9 Wheat., Bank v. Osborn, down to The Arlington Case, 1 Sup. Ct. Rep. 240, recently decided, this form of action has been sustained by the supreme court in proper cases.

You may not sue the state unless she consents; and if she be an indispensable party not consenting, you can maintain no action at all. But she is not a necessary party, and the complainant here can prevent his anticipated wrong and irreparable damage, by restraining the party who is about to commit it, without joining the state. Litchfield v. Co. Hamilton, 101 U. S. 781, note; Belknap v. Belknap, 2 Johns. Ch. 463. Nor does the fact that the state has provided a remedy for the complainant deprive him of any other that exists. The complainant is a non-resident of Virginia. His citizenship entitles him to apply to the United States courts for the exercise of their equitable jurisdiction in a proper case. That .equitable jurisdiction was not derived from the states, but from the constitution of the United States, and remains the same, no matter what laws are passed by the states respecting legal remedies or forms of procedure. This is the proper forum of the non-resident citizen, and he is not deprived of his rights in it by the passage of any act by the legislature of Virginia respecting suits at law against the tax-collectors of the state. We have here a non-resident citizen. He seeks equitable relief against a tax-collector who is about to do an act which, if this prima facie case made in the bill can be maintained, will do it irreparable damage, in violation of the constitution of the United States. This jurisdiction has been exercised many times by the United States courts in like cases, and, in my judgment, the prayer of the bill should be granted and the preliminary injunction issued as prayed, and it will be so ordered.

My brother, the district j udge, does not concur, and files a separate opinion.